Faculty Spotlight: Erwin Danneels Externing with M Ventures to Define, Measure Strategic Returns on Investments
By Keith Morelli
TAMPA (October 5, 2018) -- M Ventures invests in innovative start-up companies. Its portfolio consists of companies forging cutting-edge developments in pharmaceuticals, life sciences and performance materials; the kind of entrepreneurial ideas that have the potential to change the world, or at least make it better.
Like its interest in cultured meat.
"It's totally new," said Erwin Danneels, associate professor in the Marketing Department of the Muma College of Business, who is externing with M Ventures this semester.
Cultured meat, also called clean meat, is synthetic or in vitro meat, produced through the cultivation of animal cells, creating a form of cellular agriculture.
"It doesn't involve the slaughter of animals," Danneels said. "This is a possible example of a game-changer M Ventures is looking for."
As a strategic investor, M Ventures looks for both strategic and financial benefits from its investments. Measuring success financially is easy: just look at the bottom line. But measuring strategic returns is a little more difficult and the Amsterdam-based corporate venture capitalist wants more from its investments than dollars. Some of the key strategic reasons for investing in start-ups include opening a window on cutting edge technologies and emerging market trends, and identifying potential R&D partners, and even acquisition targets.
"So, my project is to define and measure those ideas," Danneels said. "The challenge for me and them is to measure strategic returns and establish accomplishments. Financial returns are easy to measure. You have numbers to work with. But strategic gains are very hard to measure and define."
Danneels, whose research focuses on the growth and renewal of corporations in the face of changing technological environments, is taking a semester off to work with M Ventures to both define strategic returns and come up with a way to measure strategic performance. He is part of the growing externship program at the Muma College of Business, which relieves professors of teaching duties for a semester to work with external businesses, such as M Ventures.
M Ventures is the corporate venture capital arm of Merck KGaA, a German multinational corporation that is active in life science, lab supplies, performance materials and pharmaceuticals. Though he works mostly remotely, Danneels has traveled to the headquarters in Amsterdam and the parent company in Germany and later this month, he heads to Boston to meet with corporate officials there. He said he keeps the company updated on his work through telephone calls, email and Skype.
The company's mission statement says its mandate is to invest in innovative technologies and products.
"We invest globally in transformational ideas driven by great entrepreneurs," the statement says. "We have a significant focus on early stage investing and company creation ... "
Danneels said hooking up with M Ventures was a give-and-take process.
It began with a research paper he had written that appeared in the MIT Sloan Management Review this spring, which put him in contact with M Venture's general manager. Several conversations later, M Ventures offered Danneels the externship.
The externship program at the Muma College of Business is distinctive, Danneels said. The corporations get – at no cost – the expertise of an academic and the research he or she brings along and conducts while working there; the professor gets a fresh perspective on what's going on in the real world of business and students benefit because that professor returns with fresh ideas and relevant material to present in his or her classes.
"I've mentioned this to several people in my academic circles (outside of USF) and nobody has heard of such a program," he said, "It's something unique and valuable. I'm getting some practical experience and my students, they always light up when I begin talking about my real-world experiences."